If there's one thing you'll pretty quickly realise when you first start
looking around for car insurance, it's that there are a lot of insurers out
there, offering a lot of different packages and products, and even more brokers.
The fact that you're here means that you've had at least a brief look around and
you're now looking for ways of narrowing your options and refining your choices.
This is where our insurance reviews come in really handy - so make sure you
browse through them, as this is really the best way to get a concrete handle on
what's out there, and to be able to compare the various offers - in terms of
affordability, what the different packages from the different insurers contain,
something of the track record of the different insurers and the extra benefits,
services and value-added options that are also available.
Broadly speaking, there are essentially 3 types of insurance providers of one
sort or another. These are:
- Direct insurance companies
- Insurance brokers
- Insurance aggregators
Direct insurance companies
These are insurance policy providers that have set up operations in such a
way that you deal directly with them, without going through an insurance broker.
In the past, organising an insurance policy was popularly seen as a complicated,
vaguely murky process, best left to professional brokers to navigate on your
behalf. And this was indeed often a fair assessment of the state of affairs.
However, insurance companies nowadays have realised that it is in their best
interests to make the process as easy and transparent as possible for potential
clients. (Of course they've been helped to this conclusion by the passing of
certain legislation in South Africa that makes a good deal of simplicity and
transparency mandatory.)
As a consequence, many insurance companies have realised that if they make it
simple for clients, there's no need for intermediate brokers. Most direct
insurers have invested a lot of money in infrastructure and training to make it
as easy as possible for policy holders and prospective clients to understand and
take out insurance policies. This includes multi-million rand call centres,
staffed by well-trained consultants on a 24-hour basis. So all you have to do is
call to get a quote, and you can take out the policy immediately on the phone.
The internet has also opened up a very efficient channel for direct
insurance. These days the direct insurance companies have instant online
quotation request systems - you simply input your information and you get an
immediate quote. You can also apply online, manage your policy and make claims.
The big advantages here are that it's quick and efficient, and you save on
brokers' commissions. But it also means that you have to do the shopping around
and evaluating by yourself, often calling a whole bunch of different insurance
companies and going through the same process each time - or filling in forms on
a number of different websites. This is once again where we help you, but
putting all the information in one place.
Insurance brokers
These are companies that act as resellers for insurance companies. They will
typically have broker agreements with certain insurance companies and will
recommend the right policy to suit your needs. They handle all the paperwork for
you, and manage your relationship with the insurance company.
The benefit is that it can save you time by not having to do all the research
and shopping around yourself, and you theoretically have an insurance expert who
can advise you on the policy best suited to you. They can also show you how to
save money and which policies will give you the best value for your money.
Of course you pay for this help, in the form of brokers' fees and commissions
- a portion of your premiums goes towards paying this. Plus you also have to
trust that you are indeed being given the best advice, and not just being sold
the policy that the broker most wants to sell, or will make the most commission
on.
It's because of the danger of misuse that the broker system has come under
fire lately - but it has to be said that if you have reputable, trustworthy and
knowledgeable brokers, they really can help you make the best decisions and get
you the best value for money.
Insurance aggregators
These are similar to brokers, except that they don't only have agreements with a
few insurers on whose behalf they sell policies. Instead they provide
information on all the policies from all the insurers, leaving it up to you to
decide who to go with. They will usually make recommendations as to which
policies will suit you best, after you have given them your requirements, but
this is not always done in as personalised a way as having a dedicated broker.
It's largely via the internet that this type of insurance provider operates.
Their websites feature personal profile and quotation comparison tools. You fill
in your profile and requirements and are then able to compare suitable quotes
from as many insurers as fit the bill. The aggregator takes a commission for
making the sale, so to speak, but does not represent you with the insurance
company - you effectively still deal directly with the latter when taking out a
policy.
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